Professor’s Comments September 7, 2022
Posted by OMS at September 7th, 2022
Stocks fell immediately after yesterday’s open, then tried to stage a rally but failed and closed sharply lower. The Dow finished with a loss of 173 points, closing at 31,145, which is only 95 points from my near-term target of 31,050. The NASDAQ and S&P were down 86 and 16 points, respectively. Volume on the NYSE was moderate, coming in at 108 percent of its 10-day average. There were 17 new highs and 222 mew lows.
By not staging a wave ‘c’ rally of sub-wave 2 up yesterday, the Dow now has two possibilities. The first is that both sub-wave 1 down AND sub-wave 2 up have completed and wave 3 down is starting now. The other is that sub-wave 1 down is still ongoing and will likely complete near my short-term target of 31,050 with sub-wave 2 up next. If this second scenario is happening, the Dow could still rally toward the 32,164 to 32,289 level in a wave 2 retracement before starting wave 3 of Wave 3 down. If this is the case, Wave 3 down won’t start for another week or so, possibly on 15 September which is another Fibonacci turn date.
The Market Timing Indicators for the Dow, S&P, NASDAQ, and Russell are negative.
The Scalp Trading Indicators on the same indexes are negative.
The Dean’s List and The Tide are negative. Students should take some time to look at the Dean’s List. It’s the shortest it’s been in a long time. I believe its signaling that the Wave 3 decline is fast approaching.
The Sector Ratio weakened to 4-20 negative after yesterday’s session. The top four strong sectors were Real Estate (2), Autos (2), Utilities (1), and Energy (1). The top five weak sectors were Consumer Products (-4), Semiconductors (-4), Retail (-3), Telecoms (-3) and PharmaBio (-3).
My Doctor’s Trade on TZA was up another1.08 points yesterday, closing at 38.21. The trade is now up 8.71points or 30 percent since the last Green Arrow appeared on 26 August. My short-term target is still near the 39.40 level, so students should be looking to manage their money if the second scenario I outlined above (a Wave 2 rally) is going to happen. The 39.40 level is where an earlier wave 4 stopped, which should now act as upside resistance. This level is equivalent to 179-180 on IWM, the ETF I use to track the Russell 2K. By the time Wave 3 down completes, IWM could be trading below 150, with 140 possible.
I’m still on the side-lines with gold and silver waiting for Wave ‘B’ down of the pattern to complete
Bottom Line: With the indexes fast approaching my short-term downside targets, I’m still holding my inverse positions, but watching closely for the next Red Arrow. Because the Dow did NOT behave as I expected yesterday, I’m on my toes ready to take profits. Right now, I’m nervous as a long-tailed cat in a room full of rocking chairs. I still believe the next major target for the Dow is the 30,000 level. However, once it gets near 31, 050, it still might stage one more 1,000-point rally before it starts to move substantially lower. Because of this, I’m still being cautious with my inverse positions until the Dow breaks below 30,000 (29,650 to be exact).
That’s what I’m doing
h
Marcia and I will be traveling to Cornwall, UK later this morning. Cornwall is a place where Marcia has always wanted to visit because some of her ancestors are from there. In preparation for the visit, we have been watching a TV series called ‘Doc Martin’. If you haven’t seen the series which consists of eight seasons, I highly recommend it. It’s funny and the scenery is absolutely beautiful.
Anyhow, because of the 5-hour time difference, and the fact that we’ll be traveling to two cities by motor coach, supplying updates will be somewhat problematic. My next planned update will be the WSR when I’m in Falmouth this weekend. However, if something unexpected happens, I’ll publish a short update as soon as I get to an internet connection. I should be back home by this time next week.
Market Signals for
09-07-2022
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEG |
THE TIDE | NEG |
Index | Signal | Signal Date |
---|---|---|
DOW | NEG | 29 Aug 2022 |
NASDAQ | NEG | 26 Aug 2022 |
GOLD | NEG | 26 Aug 2022 |
U.S. DOLLAR | POS | 23 Aug 2022 |
BONDS | NEG | 11 Aug 2022 |
CRUDE OIL | NEU | 30 Aug 2022 |
CRYPTO | NEG | 19 Aug 2022 |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.
Category: Professor's Comments